A program that allows for individuals to participate in liquidity pools and receive payouts related to the activities in the pools they entered.
Farms are set up using smart contracts which enables users to deposit cryptocurrency. The key with liquidity pools is there has to be an equal amount of each pair that goes into the pool.
Once deposited, the individual is now farming. This is the generating of a return based upon the transactions occurring in the pool. Each transaction has a fee, which is then used as part of the APR. Also, payouts will come in the native token of the platform.
A few examples are:
- Sushiswap: $SUSHI
- Cubfinance: $CUB
- Polycub: $POLYCUB
The results of farming is one's harvest, the cryptocurrency amassed by being part of the liquidity pool.